Given the scope of The Elder Scrolls V: Skyrim, it's not surprising to learn that early production kicked off five years ago. It was just after Bethesda Game Studios' hit The Elder Scrolls IV: Oblivion shipped when the developer started kicking around rough concepts and early designs.

"We wanted to do something that has a very different vibe than Oblivion's," says Bethesda's Todd Howard, "where we wanted to stay more rugged."

The heavy lifting didn't start on Skyrim until Fallout 3shipped in 2008. With its Elder Scrolls games, Bethesda usually waits for a new hardware cycle. With Skyrim, it didn't feel it was necessary.

"We had a really big laundry list of things we knew that we could do on the current generation of consoles," Howard says, before reading down an impressive list of changes. Smarter artificial intelligence; a complete overhaul of the game's visuals, including full shadows and more; a new quest system; a new interface; a new animation system... the list goes on.

"Even though it's on a console you have where you've played a lot of games," explains Howard, "we wanted to take you to another world."

After getting a first look at Skyrim in action last week, it's clear that what the developer has in store is decidedly Elder Scrolls. But it's Elder Scrolls in a way that you've never seen before, and one that's sure to take your breath away.

Skyrim begins some two hundred years after the close of Oblivion. The player is a prisoner being led to his (or her, if you please) execution. The crime for which he's been convicted isn't particularly relevant -- were you guilty? were you framed? -- since there will soon be an escape. Good thing: the player is the last of the Dovahkiin, the "Dragonborn," and the world's only hope in surviving an attack from a malevolent god who has taken the form of a dragon.

When Howard boots up the demo and we enter the massive province of Skyrim, the visual upgrade is striking. It's an astonishingly realized world, this particular region of the game's expansive realm being blanketed in snow that drifts softly from the sky. Howard stops to take a look at the flakes as they cover a rock in real time. Off in the distance, we see a massive snow-covered mountain that he identifies as the "Throat of the World," the largest one in Skyrim. You can walk to that mountain, he says, and ascend the 7,000 steps to its peak.

As Howard moves his character casually throughout the world, it truly feels alive. In an area not coated in crisp white snow, we see far more green; flowers dot a field, and he stops to pluck one to add to his inventory. He later pauses to admire a flowing river that's splashing against rocks, and I spot fish jumping from the water.

"We like the downtime -- we like the moments of watching the sunset," he explains, "and staring at the water."

This beauty, Howard says, is something they didn't have a chance to explore with a world like Fallout 3's.

"It's kind of nice for our world artists coming off of Fallout 3, when I [can] tell them 'Alright, you can use the green channel again,'" he jokes.

More notable perhaps than the game's visuals is the interface, which has been given a complete overhaul since Oblivion. Pressing a single button brings up a four-point compass interface. From here you'll use the D-pad to look in any of the four directions: up to the sky to see your character's skills; down at the earth to see the world map; to your right ("over your shoulder") for your inventory; and to the left for a quick glance at your magical items and abilities.

The interface itself is clean and uncluttered. For your items and spells, it simply brings up a cascading menu, separated by item types. You'll not only be able to see items and spell names, but attributes as well. Even better, everything you collect is fully modeled in 3D -- from an axe to the flower Howard snatched from the field -- meaning you can closely examine everything you pick up from the game world. Just by looking at it you can see how it's made, and once you get to know the world better, even discern which culture it originates from.

You'll be able to set favorites, too, like bookmarks for your items. By doing this, you'll be able to quickly and easily access the items in real time with a simple press of the D-pad.

Looking up to the heavens brings you to your character's skills, a quick map of the constellations in the sky. Each constellation, Howard points out, is actually a skill tree. As you build out your constellations, earning perks as you level up, you're creating what appear to be custom constellations that could be completely different from another player.

"I was designing the interface and I wanted it to be very visual," Howard explains, discussing the move away from menus bogged down with text and numbers, which he likens to boring, Excel-style spreadsheets.

Bethesda has also completely updated and revamped its Radiant AI system, too. In Oblivion, AI characters walked around and talked about doing things, but you never really saw them doing, well... much of anything. In Skyrim, the world and its inhabitants have substance, and feel alive. In one area, a lumber town called Riverwood, we watched folks chopping and moving wood, for instance.

"[We really want] to get activities on the screen," says Howard. "Everything you see characters doing, you can do. They work, they have lives, there's an economy... you can even sabotage the lumber mill, which will affect the local economy."

The expanded Radiant AI also applies to how some of the game's miscellaneous side-quests are determined, which may be the most interesting new aspect of Skyrim. Basically, the game looks at how you're playing -- what you've done, the places you've visited, and how you've interacted with characters -- and customizes quests for you. It's a mix of scripted quest events with certain parameters that the game can fill in to modify the tasks for individual players.

It's maybe easiest to think of it like "Mad Libs" for questing. An example might be a random quest encounter with a character whose child has been kidnapped. The basics of this abduction scenario have been scripted by Bethesda, but the specifics have not. The game will search out a person in the game world with a child, and then will even be smart enough to put said captured youth in a dungeon the player hasn't yet visited or discovered. In this way, miscellaneous quests will always remain fresh, and could differ greatly from player to player.

Bethesda has also focused on making the combat in Skyrim feel heavier and more visceral than ever before. Howard says a lot of time was spent on trying to make it look like "guys are really trying to kill each other," and it shows. From the moment your character swings his heavy blade, it's obvious, and the way enemies react violently to the business end of a weapon nails the point home.

With a controller in your hands, the left trigger will control what's in your left hand; the right, what you're holding in your right. This gives you a number of mix and match opportunities: sword and shield; magic and a sword; and even one spell in each hand. For instance, equipping "heal" in both hands will allow you to cast both at once for a more powerful spell. Swapping between spells, weapons, and more is as simple as accessing those "bookmarked" items with the D-pad.

Howard also showed off a skill unique to Dragonborn, a set of abilities called "Dragon Shouts." Throughout the game you'll discover "words of power," which you'll string together to create shouts. Words of power come in levels of three, or rather, can be three-word phrases. If you only learn one word of the phrase, you'll be able to use the shout, but only when you learn and discover all three words will it be at maximum power.

The shouts, which are separate from the game's magic items and spells, are activated with the right bumper (or R1 on a PlayStation 3 controller). Tap the button to say one word; hold it down longer to read off the entire phrase. We saw two in our demo, "Slow Time" (does what you'd expect) and "Unrelenting Force" (sent enemies flying backwards in its wake).

Speaking of dragons, yes, you'll battle them in Skyrim. They're the game's "big boss" characters, and we had a chance to see one in combat. Using a freezing spell, Howard brought the massive, fire-breathing winged creature down to earth, and ran in for a series of quick melee strikes. After a long battle, the beast lay defeated, and then burst into flames as the Dragonborn devoured its soul.

And what exactly do you do with a dragon's soul? Bethesda's not saying right now. We've only seen a small taste of the world of Skyrim, and there's still so much to be explored.

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